In the large-scale war between giants Apple, Adobe, Microsoft and Google, video has become the latest battlefield. As PCs and mobile devices consume more and more video, the four companies battle to capture content owners and device manufacturers mind share, in order to ensure user experience market dominance.
Since video formats and protocols are fairly well standardized, the main area for differentiation remains codecs.
Codecs are left to anyone's implementation choice. The issue can be thorny, though, as most codecs used to decode / encode specific formats require payments of license to intellectual property owners.
For instance, the H.264 format is managed by MPEG LA, who has assembled a pool of patents associated with the format, from diverse third parties and is licensing its usage, collecting and redistributing royalties on behalf of the patent owners. H.264 is a format used for transmission of videos in variable bandwidth environment and has been adopted by most handset manufacturers, Microsoft, Apple and Adobe as the de-facto format.
If you are Google, though, the idea of paying license to third parties, that are in most case direct competitors for something as fundamental as video is a problem.
As a result, Google has announced that they are converting all of Youtube most watched videos to WebM and that the format becomes the preferred one for all Google properties (Youtube, Chrome...).
The purpose here, is for Google to avoid paying royalties to MPEG LA, while controlling user experience by trying to integrate vertically the content owners, browser and device manufacturers codec usage.
It does not mean that Google will stop supporting other formats (flash, H.264...) but the writing is on the wall, if they can garner enough support.
It is arguable whether WebM can actually circumvent MPEG LA H.264 royalty claims. There are already investigations ongoing as to whether VP8 is not infringing any of H.264 intellectual property. Conversely, the U.S. Department of Justice is investigating whether MPEG LA practices are stifling competition.
In the meantime, content owners, device manufacturers, browser vendors have to contend with one new format and codec, increasing the fragmentation in this space and reducing interoperability.